Communications

Members of the communications industry are becoming accustomed to finding statutory amendments to the Canadian telecommunications regulatory framework in lengthy omnibus budget implementation bills presented to Parliament.

Previous Amendments 

Included in the 904 page 2010 budget implementation bill (Bill C-9) was an amendment to section 16 of the Telecommunications Act to remove foreign ownership restrictions on satellites. (Satellites thus joined international submarine cables and satellite earth stations in not being subject to such restrictions.)

In the 2012 budget implementation bill (Bill C-38), which comprised some 452 pages, section 16 of the Telecommunications Act was further amended to remove foreign ownership restrictions on carriers with less than a 10 per cent market share based upon total Canadian telecommunications revenue as determined by the CRTC. The CRTC has determined that the total of such revenues in 2013 amounted to $44.8 billion, so any carrier with annual Canadian telecommunications revenues of less than $4.48 billion is not subject to the foreign ownership restrictions. The amendments also permit exempt carriers to retain the exemption if they grow beyond the threshold by means other than mergers with, or acquisitions of, other carriers.

In the 380 pages of the first 2014 budget implementation bill (Bill C-31) to implement the 2014 budget tabled on February 11, 2014, a new section 27.1 was added to the Telecommunications Act to provide caps on roaming charges for each of voice, data and text messages by one Canadian carrier to another carrier. These caps will apply until they are repealed on a date to be fixed by order of the federal Cabinet. It is anticipated that the repeal of section 27.1 will occur after the CRTC releases its own decision on appropriate caps in its current review of wholesale mobile wireless services in the proceeding that was commenced in Telecom Notice of Consultation CRTC 2014-76.

Current Amendments

A second budget implementation bill (Bill C-43) relating to the 2014 budget was tabled on October 23, 2014. Included within the 478 pages of Bill C-43 are a number of amendments to the Telecommunications Act which may have escaped the attention of the communications industry and the public generally.

Paper Bills

One amendment enacts a new section 27.2 that reads as follows:

Any person who provides telecommunications services shall not charge a subscriber for providing the subscriber with a paper bill.

The only noteworthy aspect of this rather innocuous amendment (a similar amendment is made to the Broadcasting Act by Bill C-43) is that it is directed to “any person” who provides telecommunications services rather than just to Canadian carriers (facilities-based carriers) and telecommunications service providers that provide basic telecommunications services. Prior to Bill C-43, only such carriers and service providers were regulated under the Telecommunications Act (although users of telecommunications services are also subject to the Act in respect of unsolicited telecommunications).

Sharing Confidential Information

Another amendment, to section 39 of the Telecommunications Act, permits the CRTC to share confidential information submitted to it in CRTC proceedings with the Commissioner of Competition under the Competition Act on request by the Commissioner if the CRTC determines “that the information is relevant to competition issues being considered in the proceedings”. A number of consequential amendments impose confidentiality obligations on the Commissioner of Competition and the Commissioner’s staff.

Telecommunications Apparatus

A number of technical amendments are made to Part IV.1 of the Telecommunications Act which grants powers to the Minister of Industry and the federal Cabinet to regulate the technical features of telecommunications apparatus that can be connected to the networks of Canadian carriers or used in customer premises. These amendments appear to be “housekeeping” rather than substantive new provisions.

Inspection Powers

Amendments are made to section 71 of the Telecommunications Act to provide that the inspection powers in that section are “for the purpose of verifying compliance or preventing non-compliance with the provisions of [the Telecommunications Act] or any special act for which the [CRTC] is responsible and with the decisions of the [CRTC] under [the Telecommunications Act]”. New provisions are added (in sections 71(8), 71(9) and 71(10)) to assist inspectors in making a search and to require the provision of information that the inspector considers necessary. However, these amendments are superseded by other amendments to section 71, also contained in Bill C-43, that take effect when portions of the Fair Elections Act pertaining to the CRTC’s responsibilities to regulate voter contact calling services are in force to permit inspections for that purpose as well.

Administrative Monetary Penalties

The CRTC has the power under section 72.01 of the Telecommunications Act to impose administrative monetary penalties (“AMPs”) for failure to comply with the unsolicited telecommunications requirements set out in section 41 of the Act. The AMPs relating to section 41 are up to $1,500 per violation in the case of an individual and up to $15,000 in the case of a corporation. Bill C-43 amends the Telecommunications Act under new sections 72.001 to 72.0093 to give the CRTC the power to impose AMPs for substantially all other contraventions of the Act or of regulations or decisions made by the CRTC under the Act. The AMPs under the new provisions are substantially higher than for contraventions of section 41: up to $25,000 ($50,000 for subsequent contraventions) in the case of individuals, and up to $10 million ($15 million for subsequent contraventions) in the case of corporations.

Extension of Jurisdiction

The most significant amendment to the Telecommunications Act in Bill C-43 may be the new section 24.1 that reads as follows:

24.1 The offering and provision of any telecommunications service by any person other than a Canadian carrier are subject to any conditions imposed by the Commission, including those relating to 

  1. service terms and conditions in contracts with users of telecommunications services; 
  2. protection of the privacy of those users; 
  3. access to emergency services; and 
  4. access to telecommunications services by persons with disabilities.

The primary focus of the Telecommunications Act was originally on the regulation of telecommunications common carriers, which are defined as persons who own or operate a transmission facility used by either the owner or another person to provide telecommunications services to the public for compensation. Service providers that resold services or facilities provided by other carriers were not treated as carriers and were not subject to direct regulation by the CRTC, although telecommunications service providers (“TSPs”) – defined as persons providing basic telecommunications services, whether carriers or resellers – were required under section 16.1 of the Telecommunications Act to hold a licence issued by the CRTC to provide international telecommunications services, and were required under section 46.5 of the Telecommunications Act to contribute to a fund to support continuing access by Canadians to basic telecommunications services. When the CRTC wished to impose other obligations on resellers or TSPs, it did so indirectly by requiring the carrier providing the reseller or TSP with underlying facilities or services to impose such obligations as a matter of contract.

Section 24.1 now gives the CRTC the power to order resellers and TSPs who are not carriers – indeed the power to order “any person” who offers or provides telecommunications services – to comply with any conditions imposed by the CRTC. Furthermore, the new AMPs provisions enacted by Bill C-43 give the CRTC a powerful means of enforcing compliance with such orders. Many persons offering telecommunications services in Canada who considered that they were not subject to direct regulation under the Telecommunications Act will learn that this is no longer the case when Bill C-43 has been adopted by Parliament and comes into force.